The IRDAI panel analyzes the payment of the flexible premium to increase microinsurance
Hyderabad: In an attempt to ensure deeper penetration into the country, the microinsurance committee, which has submitted its report to the IRDAI insurance regulator, has based on offering customers more flexibility to pay premiums, either daily , biweekly or even monthly and quarterly.
“There should be an option to pay a single premium in daily/biweekly/monthly/quarterly installments. Clients should be allowed to pay the mortality premium in a lump sum with the remaining premiums that must be paid in installments, ”the committee recommended.
The committee stressed the importance of keeping the policy simple and understandable for customers, as that would give them confidence to opt for it. The benefits of the product should be simple so that the distributor can transmit them easily and that the customer understands them, he said. In addition, he added that a simple one-page proposal form and a digital policy document should be applicable to all insurers.
The committee was of the opinion that the price of microinsurance products can be reduced in several ways, as the reduction in the reserve requirement, even for a short duration, can help improve the price. He also said there is a requirement to exempt stamp duty on microinsurance products.
On the distribution front, he said that cooperatives or self-help groups can become partners to provide insurance solutions, as it will improve the penetration of microinsurance products. The panel said that the microinsurance (MI) agent should have the flexibility to distribute products from more than one insurance company, such as a corporate agency, and that more entities should be included in the definition of MI agents. The policy issuance function using custom IT applications should be outsourced to IM intermediaries that have the necessary human and physical infrastructure, he said.
In addition, he said that the payment of the claim can be linked to the objective of the target segment. For example, if they are saving for the child, the payment of the claim must be linked to their children's school fees.
Microinsurance is specifically aimed at low-income populations, with affordable insurance products to help them cope with and recover from financial losses. In India, about 29.5% of the total population (36 million rupees) lives below the poverty line, of which 10.2 million people live in urban areas, while 25.8 million people They live in rural areas.